A copy of our press release is posted on the Investor Relations section of our corporate website at www.pgtinc.com. Included in the press release, are the unaudited consolidated balance sheets and statements of operations prepared in accordance with GAAP and adjusted information, which was quantitatively reconciled to GAAP. Our company uses non-GAAP measurements as key metrics for evaluating performance internally.A detailed explanation of these non-GAAP measurements can be found in the press release. These non-GAAP measurements are not intended to replace the presentation of financial results in accordance with GAAP. Rather, we believe these non-GAAP measurements provide additional information for investors to facilitate the comparison of past and present performance. For today's call, Rod will provide an overview of our performance for the second quarter, then Jeff will discuss our results in more detail. After their prepared remarks, they will take your questions. With that, let me turn the call over to Rod Hershberger. Rod? Rod Hershberger Thanks Mick. Good morning, everyone. I'm pleased to report for the first time since 2006, we reported year-over-year sales growth as sales in the second quarter increased 4.6%, compared to the second quarter of 2009. While we are still experiencing difficult market conditions, we took actions necessary to increase sales in new markets and with new products. Our growth was driven by our out-of-state sales, up $1.7 million or 28% compared to prior year, and growth in our quarter sales of 3% or $1.1 million. These increases were offset somewhat by decrease in sales into international markets which are down 28% or $700,000 from a year ago. These markets are experiencing similar trends that we saw in the United States over the past couple of years. With regard to new products, our SpectraGuard lines with sales growing $800,000 leader out-of-state growth. Additionally, two new products had a positive impact on our Florida sales. First, our new PremierVue line of high-end vinyl impact products contributed $1.1 million in additional sales. Second, our new vinyl non-impact replacement product specifically designed for the Florida market contributed $600,000 in additional sales for the quarter. These new product increases were offset somewhat by lower WinGuard sales, which were down in all territories by $1.8 million.
Sales into the R&R market increased 6% over a year ago, while sales into the new construction market were essentially flat. As a percentage of total sales for the second quarter of 2010, R&R sales accounted for 76%, and new construction sales accounted for 24% of sales.Comparing our second quarter to the prior year second quarter, sales increased $2.1 million or 4.6%, driven by an increase in both our repair and remodeling markets and out-of-state markets. Gross margin increased $600,000 from last year, due mainly to the increase in sales. As a percentage of sales, gross margin was 31.1% versus 31.2%, and was affected by a shift in mix toward non-impact products. SG&A cost increased $1.4 million, due mainly to an increase of $700,000 in non-cash stock compensation expense and other compensation expense of approximately $400,000. EBITDA was $5.3 million in the second quarter of 2010, which is down $800,000 from prior year. The decrease in EBITDA was driven mainly by the increase in compensation related expense. Net income was $1,000 in the second quarter, compared to a profit of $300,000 in the second quarter of 2009. Within our core market, housing continues to show year-over-year growth as total starts in our core market were up 41% in the second quarter compared to last year, driven by an increase in single-family starts of 47%. This is the second straight quarter with year-over-year growth. As we mentioned in the first quarter conference call, we believe these starts were inflated somewhat by the tax incentives which expired on April 30th, 2010. This is evidenced by the fact that starts in the month of April were the highest for any month in the quarter. Read the rest of this transcript for free on seekingalpha.com